Correlation Between Alpha Tau and Repligen
Can any of the company-specific risk be diversified away by investing in both Alpha Tau and Repligen at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alpha Tau and Repligen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Tau Medical and Repligen, you can compare the effects of market volatilities on Alpha Tau and Repligen and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alpha Tau with a short position of Repligen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Tau and Repligen.
Diversification Opportunities for Alpha Tau and Repligen
Very poor diversification
The 3 months correlation between Alpha and Repligen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Tau Medical and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen and Alpha Tau is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alpha Tau Medical are associated (or correlated) with Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of Alpha Tau i.e., Alpha Tau and Repligen go up and down completely randomly.
Pair Corralation between Alpha Tau and Repligen
Given the investment horizon of 90 days Alpha Tau Medical is expected to generate 2.56 times more return on investment than Repligen. However, Alpha Tau is 2.56 times more volatile than Repligen. It trades about 0.22 of its potential returns per unit of risk. Repligen is currently generating about 0.39 per unit of risk. If you would invest 310.00 in Alpha Tau Medical on November 2, 2024 and sell it today you would earn a total of 70.00 from holding Alpha Tau Medical or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Tau Medical vs. Repligen
Performance |
| Timeline |
| Alpha Tau Medical |
| Repligen |
Alpha Tau and Repligen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Tau and Repligen
The main advantage of trading using opposite Alpha Tau and Repligen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Tau position performs unexpectedly, Repligen can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Repligen will offset losses from the drop in Repligen's long position.| Alpha Tau vs. Eyenovia | Alpha Tau vs. Ocular Therapeutix | Alpha Tau vs. Tenaya Therapeutics | Alpha Tau vs. Inozyme Pharma |
| Repligen vs. Intuitive Surgical | Repligen vs. ResMed Inc | Repligen vs. Merit Medical Systems | Repligen vs. ICU Medical |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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